Many of us use this time of year to rest and sneak in some recreation before we turn attention to the coming season, but can you believe we are almost 1/12 of the way through 2020? Dang, it goes fast!
January isn’t over quite yet, so we’ve all still got some time to chill AND to think about what actions can impact our business the most this year.
I’m up for getting the thinking started with three things to consider when deciding on your next move towards a more profitable business.
The Path of Least Effort
Adding some profit to your business doesn’t always have to be hard work. Sometimes more profit is hiding right under our noses and can be accessed easily with some intention and smart decision making.
Here are a few suggestions that shouldn’t require much effort at all:
- Increase your margins by doing a bit of comparison shopping on materials. When vendors compete (even if they are unaware of it), we all win more profit.
- Negotiate for better prices with existing vendors if you are making large quantity purchases (I just walked a contractor through this with surprising success).
- Review your most profitable projects from the past two years to determine why they delivered more profit. Was it because it was in your wheelhouse of competency? Did a high percentage of the project come from high margin mark-ups? Was it some other reason? If you made it a point to find more projects like this, would this year be more profitable than last year?
- Scrutinize your estimating process. Are you adequately pricing each job, or are you letting profit needlessly slip away? Ask your self what you can address in your next estimate to make the situation more profitable. Be Bold!
- Can you find your next profitable job just by asking? Which one of your existing clients has billable work? Is there a possibility to create some lucrative income by merely reaching out to them? Think of who you can contact and do it.
Speed to Money
Experience has proven to me that “speed to money” is one of the smartest considerations to identify the next business development action you should take.
“Speed to money,” forces you to consider how fast your actions could lead to a new client or new job opportunity.
For instance, if your job board is alarmingly thin, it’s smarter to pay for an ad, make phone calls or even knock on doors than to is to post random things on social media. If your season is already fully booked, then it can be well worth your time to plant seeds that will take a longer time to germinate, like investing in search engine optimization (SEO), for example.
Assess your needs and consider how critical speed to money is for you.
In my presentation for the NHLA this past fall, I coined the term “The Contractor Dilemma.” The dilemma comes from operating your business like a tradesperson instead of a business owner.
Utilizing systems to run your business separates you from those who are mucking around in the unproductive aspects of self-employment. Systems provide leverage and leverage scales success. If you are not using systems to generate new leads, estimate, sell, track your projects, gain referrals, ask for reviews, and communicate with your client list, then I have one question for you, why not?
Because I’ve officially dubbed 2020 the year of higher profits, I’d love for you to use this information to make your next move one that pays off, big time.
Next Article: 5 Principles of Contracting Success
About the Author: Wayne Lamarre is a construction marketing expert, speaker, and business development consultant, who specializes in helping contractors go from good to great. Contact Wayne to add fuel to your construction business.